Watchdog: Democratic-leaning 527s raise most money

Howard Roark

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Presidential race best-funded ever

Monday, December 13, 2004 Posted: 12:03 PM EST (1703 GMT)


WASHINGTON (AP) -- Whatever the reasons John Kerry and the Democrats lost the race for the White House, lack of money wasn't one.

Tax-exempt pro-Democratic groups raising big checks for this year's election collected almost twice as much money as their Republican rivals in the presidential race, a study shows. The financial advantage comes in addition to record fund raising by Kerry and the Democratic Party.

In all, the nonparty political groups, known as 527s because of the tax code section that covers them, raised about $534 million and spent roughly $544 million in the 2003-04 election cycle, the analysis by the nonpartisan Political Money Line campaign finance tracking service found.

The prolific fund raising is a sign that such groups, many of which debuted in the 2004 election season, will have no problem surviving the competition for contributions, Kent Cooper, co-founder of Political Money Line, said Sunday. Fund-raising drives over Web sites and through e-mail helped several become political players very quickly, he said.

"I think it shows you that with the Internet, anyway, your lines of communication can be large pipelines for quick money," Cooper said.

The presidential race drew most of their attention. Groups supporting John Kerry or opposing President Bush raised $266 million. Those opposing Kerry or backing Bush collected $144 million, Political Money Line found. The study was based on a review of the organizations' postelection campaign finance reports to the Internal Revenue Service.

Democratic activists began forming such groups soon after a law took effect in November 2002 that banned national party committees from collecting "soft money" -- corporate or union contributions in any amount and unlimited donations from any source.

Leading groups such as the Media Fund and America Coming Together, jump-started by multimillion-dollar donations from wealthy businessmen such as George Soros, focused on advertising and get-out-the-vote operations, expensive activities the national Democratic Party could no longer raise six- and seven-figure donations to finance. The outside groups' similarities in objective to party committees prompted campaign finance watchdogs to call them "shadow parties."

Republicans, relying in part on their long-standing advantage over Democrats in collecting donations in modest amounts such as $10 or $20 as well as checks up to the new individual donor of $25,000 per year, initially held off on formation of their own 527 groups.

Instead, they argued that the pro-Democratic organizations violated the new law's broad ban on the use of soft money to influence federal elections. The Federal Election Commission did not curb the groups' activities, however, and GOP activists decided last spring to forge ahead with their own outside groups.

The new Republican groups quickly raised millions from wealthy Republicans such as Texas homebuilder Bob Perry. His donations helped fund the anti-Kerry group Swift Vets and POWs for Truth, whose allegations that Kerry exaggerated his decorated Vietnam War service record garnered much attention in the campaign for weeks last summer. The pro-Bush groups' late start limited their impact on the presidential race, however.

The anti-Bush groups, meanwhile, had millions of dollars on hand by the time Kerry wrapped up the Democratic primaries last winter. They spent big on TV ads that kept Kerry's side on the air as he worked to rebuild his campaign fund.

In addition to the pro-Democratic outside groups' financial advantage over their pro-Bush counterparts in the presidential race, the Democratic National Committee out-raised the Republican National Committee by several million dollars during the two-year election cycle.

Although Bush raised an all-time presidential record of $273 million from private contributors, Kerry was not far behind. He collected a Democratic-record $249 million after veering from party tradition and becoming the first Democratic nominee ever to skip public financing and its spending limits during the primaries, as Bush did in 2000 and 2004.

Supporters of the soft money ban for parties have pointed to record fund raising by both sides as proof the law's limits work, but they and critics of the law want Congress to consider legislation that would block the outside groups from pouring hundreds of millions of dollars in soft money into the next election.

Opponents have also taken court action; the 2002 law's sponsors and the Bush campaign have lawsuits pending in U.S. District Court in Washington that seek to force the FEC to restrict spending in federal races by partisan soft-money groups.
 
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